Safaricom And Estonian Firm Differ Over Deal

Safaricom has ordered an Estonian mobile payments company to withdraw a statement it had issued alleging that the duo had signed an agreement allowing Kenyan mobile phone customers to buy applications on Windows and Google stores through airtime deductions.

The Estonian firm, Fortumo, last week published a statement on its website claiming it had entered into a partnership with Safaricom, and that this was the third such deal it had secured in Africa.

The agreement supposedly enabled Kenyan mobile phone users, who are distrustful of or unfamiliar with using debit and credit cards to pay for online transactions, the chance to buy apps through deductions on their airtime.

“Thanks to the partnership, more than 18 million Safaricom customers from Kenya will now be able to make payments online and inside mobile apps by charging purchases to their mobile phone bill,” Fortumo stated in its January 8 Press statement.

Safaricom has, however, distanced itself from the European firm, claiming it has not entered into such an agreement with the company.

The telecoms firm has also ordered Fortumo to pull down the statement from its website, something the firm promptly did days after the story was picked up by local and international media as well as industry analysts.

“We have not signed any direct deal with Fortumo,” said Safaricom’s corporate affairs director Nzioka Waita in an email response. “We asked them to pull down the release as it was inaccurate and also deliberately misleading.”

Fortumo’s head of marketing Mattias Liivak told the Business Daily that the firm has been testing the service locally over the past few months and that it was “publicly launched last week”.

Upon further questioning about the specifics of the agreement, Mr Liivak admitted that “there was no launch from Safaricom’s side.”

Fortumo, which claims to offer mobile operator billings in 83 countries, allows app developers to link their products with its system and that of a telecoms company. Once a mobile user downloads an application, the cost is immediately deducted from their airtime.

Fortumo wires 30 per cent of the end-user payment to the developers while it pockets a maximum of five per cent of the amount, Mr Liivak said.
The rest goes to the mobile operator who also benefits from increased airtime sales.

“We handle all tax on behalf of developers – if the money paid to us by mobile operators still has some taxes attached to them, we pay these ourselves and our payouts to developers are always net payouts,” said Mr Liivak.